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Analyse the challenges and tips to start and run an online classifieds website business

Classifieds is a competitive business out there, but since you have jumped into it let's learn how to make it a successful business. First let's analyze the challenges, we face in online classifieds niche.

Competition: Classifieds niche is one of the most competitive on internet. We already have lot of both players pumping their money. Quikr and Olx along with Justdial are ruling this sector, but as we know it's difficult but not impossible to make space with a better product even in a highly competitive market.

Chicken and Egg problem: Egg and chicken problem is related to user acquisition. People don't post on empty sites. We have to make sure that we have enough listings on the site to increase the trust factor on site.

Marketing: If it’s a big VC funded classified website, marketing becomes easy but for someone with very less to invest in marketing establishing a brand becomes difficult.

User-Experience: Create a classifieds website that people love. User experience is a big challenge in classifieds segment. If we consider Indian scenario, Justdial has the best user experience.

Site Speed:Speed of your website has to be really fast. If we analyse the type of visitors on classifieds, they are one searching some address or contact details and want solution at earliest. People normally don’t click a single link on google search page but open different tabs and prefer the tab which opens first. Make sure that your classifieds website is faster than competitors.

A very good analysis and challenges we face in starting and running an online classifeds business listed. I would like to add few more points with solution.

Getting Traffic on Classifieds Site: Getting traffic on site is very important to earn revenue. How do we get traffic is the main problem and here are some tips on how to get traffic on online classifieds websites.

Search Engine Optimization: Search Engines optimation is not a rocket science. In simple words SEO means creating a website with content that search engines such as google love. By applying our basic common sense we can make that Google or any search engine preferes a site which is not only user friendly but provides exact information that users need. You don't have to spam your site to put unwanted keywords, search engines are smart and can differentiate between good and bad websites.

Social Media: After search engines biggest source of traffic is Social Media. Put those like and share buttons on your site, so that your happy users can share your website. Use social media login buttons on your site. Give the sharing options to your users. Everytime an ad is posted, ask users to share it among their friends.

Reviews: Review section on a classifieds website is must and many users visit classifieds websites to just read the reviews. Tikshare has one of the best review system.

Generating Revenue

How do you generate revenue for your classifieds website? Well, i know if you had a plan to start classifieds website you also have the plans to monetize it.

However here are some of the ways to monetize your classifieds website.

Affiliate marketing is also one of the best method to monetize your online classifieds website. Classifieds is segment where users are in search of something and affiliate marketing could be a better revenue source than using ad networks.

Direct Advertisement is also a great way of monetizing your classifieds website. If you have a huge traffic and lot of listing, many advertisers would love to advertise on your website.

Premium Listings is most commonly used revenue model by big classifieds websites.

Earlier I had a discussion regarding monetization of classifieds website. Making money from online classifieds is also important to keep running the business.

Some challenges which are still not listed above and i think are important to run a classifieds website ar:

Cost of running classifieds websites

Determining cost is very important, you have to manage your cost. Various resources that have a cost attached to it are Domain registration, Hosting and maintenance of website. You have to calculate how much money you have parted for your online classifieds website. Do you have enough budget to meet the routine costs associated with your online classifieds business.

Marketing challenge

Marketing challenge is already mentioned in first post of this thread. However I would like to make it clear that other challenges are very small compared to marketing challenge. If you can market your website and get good traffic, everything else will be steamlined automatically.

Even if you need external funds to run your classifieds website, the first question you have to answer is "How much traffic you site have and what plans you have to increase the traffic of your online classifieds website?"